EUROCASH CONSOLIDATED QUARTERLY REPORT. 1 st QUARTER WorldReginfo - 8bb6bf9e-654e-431e-b269-ce89f1ee411e

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1 EUROCASH CONSOLIDATED QUARTERLY REPORT 1 st QUARTER 2017 TRANSLATORS EXPLANATORY NOTE The following document is a free translation of the report of the above-mentioned Polish Company. In the event of any discrepancy in interpreting the terminology, the Polish version is binding.

2 CONTENTS I. MANAGEMENT DISCUSSION OF THE FINANCIAL RESULTS FOR THE 1Q 2017 II. III. IV. SELECTED CONSOLIDATED FINANCIAL DATA QUARTERLY ABBREVIATED CONSOLIDATED FINANCIAL STATEMENTS SELECTED SEPARATE FINANCIAL DATA V. QUARTERLY ABBREVIATED SEPARATE FINANCIAL STATEMENTS

3 SELECTED CONSOLIDATED FINANCIAL DATA Non audited Non audited Non audited Non audited for the period for the period for the period for the period from from from from to to to to PLN PLN EUR EUR Sales Operating profit (loss) ( ) ( ) Profit (loss) before income tax ( ) ( ) Profit (loss) for the on continued operations ( ) ( ) Profit (loss) for the period ( ) ( ) Net cash from operating activities ( ) ( ) Net cash used in investing activities ( ) ( ) ( ) ( ) Net cash used in financing activities Net change in cash and cash equivalents ( ) ( ) Weighted average number of shares Weighted average diluted number of shares EPS (in PLN / EUR) (0,11) 0,01 (0,02) 0,00 Diluted EPS (in PLN / EUR) (0,11) 0,01 (0,02) 0,00 Average PLN / EUR rate* 4,3246 4,3602 Non audited Non audited as at as at as at as at PLN PLN EUR EUR Assets Non-current liabilities Current liabilities Equity Share capital Number of shares Diluted number of shares Book value per share (in PLN / EUR) 7,71 7,81 1,83 1,76 Diluted book value per share (in PLN / EUR) 7,69 7,78 1,82 1,76 Declared or paid dividend (in PLN / EUR) Declared or paid dividend per share (in PLN / EUR) - 1,05-0,24 PLN / EUR rate at the end of the period** 4,2198 4,4240 * Profit and loss items and cash flow items calculated on basis at a weighted average rate announced by the National Bank of Poland for 1Q 2017, ** Balance sheet items and book value per share have been converted using the official mid-rates announced by the National Bank of Poland prevailing on the balance sheet date.

4 EUROCASH S.A. GROUP CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2017 TO 31 MARCH 2017 TRANSLATORS EXPLANATORY NOTE This document is a free translation of the Polish original. The binding Polish original should be referred to in matters of interpretation. KOMORNIKI, 12 TH May 2017

5 Condensed interim consolidated financial statements of EUROCASH Group. CONTENTS General information Information about the Parent Entity Bodies of the Parent Entity... 3 Condensed consolidated income statement for the period from to Condensed consolidated statement of comprehensive income for the period from to Condensed consolidated statement of financial position as at Condensed consolidated statement of cash flows for the period from to Condensed consolidated statement of changes in equity for the period from to Supplementary information to the condensed interim consolidated financial statements prepared for the period from to General information Notes to the Condensed interim consolidated financial statements prepared for the period from to /33

6 Condensed interim consolidated financial statements of EUROCASH Group. GENERAL INFORMATION 1. INFORMATION ABOUT THE PARENT ENTITY NAME EUROCASH Spółka Akcyjna ( Company, Parent Entity ) REGISTERED OFFICE ul. Wiśniowa 11, Komorniki CORE BUSINESS Non-specialized wholesale trade (PKD 4690Z) REGISTRATION COURT District Court Poznań - Nowe Miasto and Wilda in Poznań, VIII Commercial Department of the National Court Register, KRS DURATION OF THE PARENT COMPANY Indefinite PERIOD COVERED BY THE FINANCIAL STATEMENTS The reporting period is 1 January March 2017 and in addition, for the income statement and statement of comprehensive income, the period from 1 January 2017 to 31 March The consolidated statement of financial position has been prepared as at 31 March 2017 and the comparative figures are presented as at 31 December Comparative data has been prepared in accordance to UE-approved IAS 34 Interim financial reporting. 2. BODIES OF THE PARENT ENTITY 2.1. MANAGEMENT BOARD OF THE PARENT ENTITY As at 31 March 2017 the Parent Entity s Management Board consisted of the following members: Luis Manuel Conceicao do Amaral President of the Management Board, Rui Amaral Member of the Management Board, Arnaldo Guerreiro Member of the Management Board, Pedro Martinho Member of the Management Board, Katarzyna Kopaczewska Member of the Management Board, Jacek Owczarek Member of the Management Board, Przemysław Ciaś Member of the Management Board. 3/33

7 Condensed interim consolidated financial statements of EUROCASH Group SUPERVISORY BOARD OF THE PARENT ENTITY As at 31 March 2017 the Parent Entity s Supervisory Board consisted of the following members: João Borges de Assunção President of the Supervisory Board, Eduardo Aguinaga de Moraes Member of the Supervisory Board, Francisco José Valente Hipólito dos Santos Member of the Supervisory Board, Hans Joachim Körber Member of the Supervisory Board, Jacek Szwajcowski Member of the Supervisory Board CHANGES IN THE MANAGEMENT AND SUPERVISORY BOARD On 13 January 2017, David Boner resigned from his position of Member of the Management Board, effective as at On 22 February 2017, Przemysław Ciaś was appointed Member of the Management Board of Eurocash S.A. 4/33

8 Condensed interim consolidated financial statements of EUROCASH Group. CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE PERIOD FROM TO Non audited Non audited 1 Quarter 1 Quarter for the period for the period from from to to Sales Sales of goods Sales of services Sales of materials Costs of sales ( ) ( ) Costs of goods sold ( ) ( ) Costs of services sold ( ) ( ) Costs of materials sold ( ) ( ) Gross profit (loss) Selling expenses ( ) ( ) General and administrative expenses ( ) ( ) Profit (loss) on sales ( ) Other operating income Other operating expenses ( ) ( ) Operating profit (loss) ( ) Financial income Financial costs ( ) ( ) Share in profits (losses) of equity accounted investees ( ) ( ) Profit (loss) before tax ( ) Income tax expense ( ) Profit (loss) for the period ( ) Attributable to: Owners of the Company ( ) Non-controlling interests (59 982) EARNINGS PER SHARE PLN / share PLN / share Profit (loss) attributable to Owners of the Company ( ) Weighted average number of shares Weighted average diluted number of shares Earnings per share from continued operations - basic (0,11) 0,01 - diluted (0,11) 0,01 5/33

9 Condensed interim consolidated financial statements of EUROCASH Group. CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD FROM TO Non audited Non audited 1 Quarter 1 Quarter for the period for the period from from to to Profit (loss) for the period ( ) Other comprehensive income for the period ( ) (20 568) Items that may be subsequently reclassified to profit or loss: - The result on hedge accounting with the tax effect: ( ) (20 568) Total comprehensive income for the period ( ) Total Income Owners of the Company ( ) Non-controlling interests (59 982) Total comprehensive income for the period ( ) /33

10 Condensed interim consolidated financial statements of EUROCASH Group. CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT Assets Non audited as at as at Non-current assets (long-term) Goodwill Intangible assets Property, plant and equipment Investment property Investments in equity accounted investees Other long-term investments Long-term receivables Deferred tax assets Other long-term prepayments Current assets (short-term) Inventories Trade receivables Current tax receivables Other short-term receivables Other short-term financial assets Short-term prepayments Cash and cash equivalents Total assets /33

11 Condensed interim consolidated financial statements of EUROCASH Group. CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT Non audited as at as at Equity and liabilities - Equity Equity attributable to Owners of the Company Share capital Reserve capital Option for purchase/selling the shares ( ) ( ) Option for purchase/selling the shares ( ) ( ) Retained earnings ( ) ( ) Accumulated profit / loss from previous years ( ) ( ) Profit (loss) for the period ( ) Non-controlling interests Liabilities Non-current liabilities Long-term financial liabilities Other long-term liabilities Deferred tax liabilities Employee benefits Provisions Current liabilities Loans and borrowings Short-term financial liabilities Trade payables Current tax liabilities Other short-term payables Current employee benefits Provisions Total equity and liabilities BOOK VALUE PER SHARE Non audited as at as at Equity attributable to Owners of the Company Number of shares Diluted number of shares Book value per share 7,71 7,81 Diluted book value per share 7,69 7,78 8/33

12 Condensed interim consolidated financial statements of EUROCASH Group. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD FROM TO Cash flow from operating activities Non audited Non audited 1 Quarter 1 Quarter for the period for the period from from to to Profit (loss) before tax ( ) Adjustments for: Depreciation and amortization Share in profits (losses) of equity accounted investees Gain (loss) on sale of property, plant and equipment ( ) Interest expenses Interest received ( ) ( ) Operating cash before changes in working capital Changes in inventory ( ) ( ) Changes in receivables Changes in payables ( ) Changes in provisions and employee benefits Other adjustments ( ) Operating cash ( ) Interest received Interest paid ( ) ( ) Income tax paid ( ) ( ) Net cash from operating activities ( ) Cash flow from investing activities Aquisition of intangible assets ( ) ( ) Aquisition of property, plant and equipment tangible fixed assets ( ) ( ) Proceeds from sale of property, plant and equipment Expenditures for purchased financial assets (38 979) - Aquisition of subsidiaries, net of cash aquired ( ) ( ) Interest received Net cash used in investing activities ( ) ( ) Cash flow from financing activities Proceeds from issue of share capital Income/expenses for other financial liabilities - ( ) Issue of financial debt securities Financing for franchisees Proceeds from loans and borrowings Income/expenses for liabilities from financial leasing ( ) ( ) Other interests ( ) ( ) Interests on loans and borrowings ( ) ( ) Net cash used in financing activities Net change in cash and cash equivalents ( ) Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period /33

13 Condensed interim consolidated financial statements of EUROCASH Group. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM TO Share capital Reserve capital Option for purchase/selling the shares Retained earnings Equity attributable to Owners of the Company Non-controlling interests Hedge reserve Total Changes in equity in the period from to Balance as at after changes ( ) Total comprehensive income for the reporting period Owners of the Company Non-controlling interests Net profit presented directly in equity (20 568) - (20 568) - (20 568) Total comprehensive income for the period from to (20 568) Share options excercised Other - ( ) ( ) - ( ) Total contributions by and distributions to Owners of the Company Total transaction with Owners of the Company, recognized directly in equity Balance as at ( ) Changes in equity in the period from to Balance as at ( ) ( ) ( ) Total comprehensive income for the reporting period Owners of the Company ( ) ( ) - ( ) Non-controlling interests ( ) ( ) Other comprehensive income ( ) - ( ) - ( ) Total comprehensive income for the period from to ( ) ( ) ( ) ( ) ( ) Share options excercised Total transaction with Owners of the Company, recognized directly in equity Balance as at ( ) ( ) ( ) /33

14 Condensed interim consolidated financial statements of EUROCASH Group. SUPPLEMENTARY INFORMATION TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS PREPARED FOR THE PERIOD FROM TO GENERAL INFORMATION 1.1. ISSUE OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS According to the resolution of the Management Board dated 12 May 2017, the consolidated financial statements of Eurocash Group for the period from 1 January 2017 to 31 March 2017 were authorized for publication. According to the information included in the report no. 2/2017 dated 10 January 2017 sent to the Polish Financial Supervision Authority, Eurocash S.A. issues its interim consolidated financial statements on 12 May Eurocash S.A. is a listed company and its shares are publicly traded STATEMENT OF COMPLIANCE These condensed interim consolidated financial statements of Eurocash S.A. Group have been prepared in accordance with IAS 34 - Interim Financial Reporting, approved by European Union. These condensed interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of Eurocash S.A. Group as at and for the year ended 31 December 2016, which is available on the website PRESENTATION CURRENCY, ROUNDINGS These consolidated interim financial statements are presented in PLN, which is the Parent Entity s functional and presentation currency. All financial information presented in PLN has been rounded to the nearest PLN (unless it is otherwise indicated) USE OF ESTIMATES AND JUDGEMENTS The preparation of the consolidated financial statements in conformity with UE IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, incomes and expenses. Estimates and underlying assumptions are made based on historical experience and other factors accepted as reasonable in given circumstances, and the results of estimates and judgements are a basis for the determination of the carrying value of assets and liabilities not resulting directly from other sources. Actual results may differ from those estimates. The range of significant judgments, estimates and assumptions was presented in the financial statements for 2016 year and in the current period has not changed. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised or in the current period and any future periods affected, if a change in estimates relates to both the current and future periods COMPARABILITY OF FINANCIAL STATEMENTS Accounting principles as well as calculation methods applied in the preparation of these condensed interim consolidated financial statements remained unchanged in comparison to the ones applied in the last annual consolidated financial statements for the financial year ended 31 st December /33

15 Condensed interim consolidated financial statements of EUROCASH Group INFORMATION ABOUT THE PARENT ENTITY AND THE GROUP Eurocash Spółka Akcyjna is the Parent Entity, registered in the District Court Poznań - Nowe Miasto and Wilda in Poznań, VIII Commercial Department of the National Court Register; registration number: KRS ; located in Komorniki, ul. Wiśniowa 11. The core business activity of the Parent Entity is non-specialized wholesale trade (PKD 4690Z). Shares of Eurocash S.A. are traded on Warsaw Stock Exchange. Eurocash Group comprises Eurocash S.A. and subsidiaries. 12/33

16 Condensed interim consolidated financial statements of EUROCASH Group. Entities comprising the Eurocash capital group and associates as at No Unit Eurocash S.A. Eurocash Serwis Sp. z o.o. Eurocash Franczyza Sp. z o.o. Eurocash Trade 1 Sp. z o.o. Eurocash Trade 2 Sp. z o.o. Eurocash VC2 Sp. z o.o. Premium Distributors Sp. z o.o. Przedsiębiorstwo Handlu Spożywczego Sp. z o.o. address ul.wiśniowa Komorniki ul.wiśniowa Komorniki ul.wiśniowa Komorniki ul.wiśniowa Komorniki ul.wiśniowa Komorniki ul.wiśniowa Komorniki ul. Bokserska 66a Warszawa ul.wiśniowa Komorniki core business activity PKD 4690Z PKD 4635Z PKD 8299Z PKD 4634A PKD 4634A PKD 7740Z PKD 4634A PKD 4690Z registration court District Court Poznań - Nowe Miasto i Wilda of Poznań, VIII Commercial Division of the National Court Register KRS District Court Poznań - Nowe Miasto i Wilda of Poznań, VIII Commercial Division of the National Court Register KRS District Court Poznań - Nowe Miasto i Wilda of Poznań, VIII Commercial Division of the National Court Register KRS District Court Poznań - Nowe Miasto i Wilda of Poznań, VIII Commercial Division of the National Court Register KRS District Court Poznań - Nowe Miasto i Wilda of Poznań, VIII Commercial Division of the National Court Register KRS District Court Poznań - Nowe Miasto i Wilda of Poznań, VIII Commercial Division of the National Court Register KRS District Court Warszawa, XIII Commercial Division of the National Court Register KRS District Court Zielona Góra, VIII Commercial Division of the National Court Register KRS nature of relationship Parent company Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary applied consolidation method Full Full Full Full Full Full Full Full date of aquisition n/a ownership interest n/a 75,00% 100,00% 100,00% 100,00% 100,00% 100,00% 100,00% voting rights (in %) n/a 75,00% 100,00% 100,00% 100,00% 100,00% 100,00% 100,00% 13/33

17 Condensed interim consolidated financial statements of EUROCASH Group. Entities comprising the Eurocash capital group and associates as at (continued) No Detal Podlasie Lewiatan Podlasie Lewiatan Śląsk Lewiatan Orbita Lewiatan Kujawy Unit DEF Sp. z o.o. Euro Sklep S.A. Ambra Sp. z o.o. Sp. z o.o. Sp. z o.o. Sp. z o.o. Sp. z o.o. Sp. z o.o. address ul. Handlowa Białystok ul. Sokólska Białystok Porosły 70A Choroszcz ul. Bystrzańska 94a Bielsko-Biała ul. Hutnicza Czechowice- Dziedzice ul. Lenartowicza Sosnowiec ul. Lubelska 33/ Olsztyn ul. Polna Włocławek core business activity PKD 4639Z PKD 4711Z PKD 7010Z PKD 4711Z PKD 4645Z PKD 7022Z PKD 4690Z PKD 4711Z registration court District Court Białystok, XII Commercial Division of the National Court Register KRS District Court Białystok, XII Commercial Division of the National Court Register KRS District Court Białystok, XII Commercial Division of the National Court Register KRS District Court Bielsko Biała, VIII Commercial Division of the National Court Register KRS District Court Katowice- Wschód, VIII Commercial Division of the National Court Register KRS District Court Katowice- Wschód, VIII Commercial Division of the National Court Register KRS District Court Olsztyn, District Court Toruń, VII VIII Commercial Division Commercial Division of of the National Court the National Court Register Register KRS KRS nature of relationship Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary applied consolidation method Full Full Full Full Full Full Full Full date of aquisition ownership interest 100% 100% 100% 100% 100% 100% 100% 100% voting rights (in %) 100% 100% 100% 100% 100% 100% 100% 100% 14/33

18 Condensed interim consolidated financial statements of EUROCASH Group. Entities comprising the Eurocash capital group and associates as at (continued) No Unit Lewiatan Wielkopolska Lewiatan Opole Lewiatan Zachód Lewiatan Podkarpacie Lewiatan Północ Eurocash Detal Sp. z PayUp Lewiatan Holding S.A. Sp. z o.o. Sp. z o.o. Sp. z o.o. Sp. z o.o. Sp. z o.o. o.o. Polska S.A. address ul. Przemysłowa 5 ul. I Dywizji Wojska Os. Winiary 54 ul. Światowida 2 ul. Krakowska 47 ul. Kilińskiego 10 ul.wiśniowa 11 ul.wiśniowa Stargard Polskiego nr Poznań Opole Dębica Włocławek Komorniki Komorniki Szczeciński Rumia core business activity PKD 7740Z PKD 7740Z PKD 6419Z PKD 8299Z PKD 7740Z PKD 4639Z PKD 4690Z PKD 6120Z registration court District Court Poznań - District Court Opole, VIII Nowe Miasto i Wilda, Commercial Division of VIII Commercial Division the National Court of the National Court Register Register KRS KRS District Court Szczecin Centrum, XIII Commercial Division of the National Court Register KRS District Court Rzeszów, XII Commercial Division of the National Court Register KRS District Court Toruń, VII Commercial Division of the National Court Register KRS District Court Gdańsk- North in Gdańsk, VII Commercial Division of the National Court Register KRS District Court Poznań - District Court Poznań - Nowe Miasto i Wilda in Nowe Miasto i Wilda in Poznań, Poznań, VIII Commercial Division VIII Commercial Division of the National Court of the National Court Register, Register KRS KRS nature of relationship Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary applied consolidation method Full Full Full Full Full Full Full Full date of aquisition ownership interest 100% 100% 100% 100% 67% 100% 100% 100% voting rights (in %) 100% 100% 100% 100% 71% 100% 100% 100% 15/33

19 Condensed interim consolidated financial statements of EUROCASH Group. Entities comprising the Eurocash capital group and associates as at (continued) No Eurocash Convenience ABC na kołach Sp. z Unit Kontigo Sp. z o.o. Inmedio Sp. z o.o. Eurocash VC3 Sp. z o.o. Duży Ben Sp. z o.o. Firma Rogala Sp. z o.o. 4Vapers Sp. z o.o. Sp. z o.o. o.o. address ul.wiśniowa Komorniki ul.wiśniowa Komorniki ul.al.jerozolimskie Warszawa ul. Bokserska 66A Warszawa ul. Wiśniowa Komorniki ul. Wiśniowa Komorniki ul. Grunwaldzka Bobowa ul. Wiśniowa Komorniki core business activity PKD 7010Z PKD 7010Z PKD 4617Z PKD 7740Z PKD 5621Z PKD 4711Z PKD 4711Z PKD 4635Z registration court District Court Poznań - Nowe Miasto i Wilda in Poznań, VIII Commercial Division of the National Court Register KRS District Court Poznań - Nowe Miasto i Wilda in Poznań, VIII Commercial Division of the National Court Register KRS District Court Warszawa, XII Commercial Division of the National Court Register KRS District Court Warszawa, XIII Commercial Division of the National Court Register KRS District Court Poznań - Nowe Miasto i Wilda in Poznań, VIII Commercial Division of the National Court Register KRS District Court Poznań - Nowe Miasto i Wilda in Poznań, VIII Commercial Division of the National Court Register KRS District Court Kraków- Śródmieście in Kraków, XII Commercial Division of the National Court Register KRS District Court Poznań - Nowe Miasto i Wilda in Poznań, VIII Commercial Division of the National Court Register KRS nature of relationship Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary applied consolidation method Full Full Full Full Full Full Full Full date of aquisition ownership interest 100% 100% 51% 100% 100% 100% 50% 100% voting rights (in %) 100% 100% 51% 100% 100% 100% 50% 100% 16/33

20 Condensed interim consolidated financial statements of EUROCASH Group. Entities comprising the Eurocash capital group and associates as at (continued) No Eurocash Sushi to go Sp. z o.o. Polska Dystrybucja Unit Nieruchomości Sp. z Eurocash Food Sp. z o.o. Sushi to go Sp. z o.o. Detal finanse Sp. z o.o. FHC-2 Sp. z o.o. Madas Sp. z o.o. Sp. k. Alkoholi Sp. z o.o. o.o. address ul. Wiśniowa Komorniki ul. Wiśniowa Komorniki ul. Piękna 24/26A Warszawa ul. Ks.Juliana Chrościckiego 93/ Warszawa ul. Wiśniowa Komorniki ul. Sempołowska Pabianice Ul Tysiąclecia Krosno Ul Tysiąclecia Krosno core business activity PKD 7022Z PKD 7022Z PKD 1013Z PKD 8299Z PKD 6920Z PKD 4634A PKD 4711Z PKD 4711Z registration court District Court Poznań - Nowe Miasto i Wilda in Poznań, VIII Commercial Division of the National Court Register KRS District Court Warszawa, XII Commercial Division of the National Court Register KRS District Court Warszawa, XII Commercial Division of the National Court Register KRS District Court Warszawa, XIII Commercial Division of the National Court Register KRS District Court Poznań - Nowe Miasto i Wilda in Poznań, VIII Commercial Division of the National Court Register KRS District Court Łódź - Śródmieście in Łódź, XX Commercial Division of the National Court Register KRS District Court Rzeszów, XII Commercial Division of National Court Register KRS District Court Rzeszów, XII Commercial Division of National Court Register KRS nature of relationship Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary applied consolidation method Full Full Full Full Full Full Full Full date of aquisition ownership interest 100,00% 100% 51% 51% 100% 100% 50% 50% voting rights (in %) 100,00% 100% 51% 51% 100% 100% 50% 50% 17/33

21 Condensed interim consolidated financial statements of EUROCASH Group. Entities comprising the Eurocash capital group and associates as at (continued) No Unit Zagłoba Sp. z o.o. Jantoń Detal Sp. z o.o. Eko Holding S.A. Ledi Sp. z o.o. Jim Sp. z o.o. address ul. Stara Huta Chrzanów ul. Sempołowskiej Pabianice ul. R. Chomicza 13C Nowa Wieś Wrocławska Kąty Wrocławskie ul. R. Chomicza 13C Nowa Wieś Wrocławska Kąty Wrocławskie ul. R. Chomicza 13C Nowa Wieś Wrocławska Kąty Wrocławskie core business activity PKD 4634A PKD 4725Z PKD 4690Z PKD 4711Z PKD 7830Z registration court District Court Kraków - Śródmieście in Kraków, XII Commercial Division of the National Court Register KRS District Court Łódź - Śródmieście in Łódź, XX Division of the National Court Register KRS District Court Wrocław - Fabryczna in Wrocław, IX Division of the National Court Register KRS District Court Wrocław - Fabryczna in Wrocław, IX Division of the National Court Register KRS District Court Wrocław - Fabryczna in Wrocław, IX Division of the National Court Register KRS nature of relationship Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary applied consolidation method Full Full Full Full Full date of aquisition ownership interest 66% 100% 100% 100% 100% voting rights (in %) 66% 100% 100% 100% 100% On Eurocash purchased 100% of shares in EKO Holding S.A. based in Nowa Wieś Wrocławska, at the same time acquiring 100% of shares in Ledi Sp. z o.o. and Jim Sp. z o.o. Detal Finanse Sp. z o.o., Eurocash Nieruchomości Sp. z o.o., Eurocash Food Sp. z o.o. and Sushi to go Sp. z o.o. are Group companies; however, due to the insignificance of their financial data, they were not consolidated. 18/33

22 Condensed interim consolidated financial statements of EUROCASH Group. Entities comprising the Eurocash capital group and associates as at No 1 2 Unit FRISCO S.A. Partnerski Serwis Detaliczny S.A. address ul. Omulewska Warszawa ul. Grażyny Warszawa core business activity PKD 4791Z PKD 6499Z registration court District Court Warszawa, XIII Commercial Division of the National Court Register KRS District Court Warszawa, XIII Commercial Division of the National Court Register KRS nature of relationship Associate Joint venture applied consolidation method Equity method Equity method. ownership interest 44,14% 50% voting rights (in %) 44,14% 50% 19/33

23 Condensed interim consolidated financial statements of EUROCASH Group GOING CONCERN ASSUMPTION The financial statements were prepared under the assumption that the Group will continue to operate as a going concern for the foreseeable future. 20/33

24 Condensed interim consolidated financial statements of EUROCASH Group. 2. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS PREPARED FOR THE PERIOD FROM TO NOTE 1. ACQUISITION OF SHARES IN A SUBSIDIARIES 1. Acquisition of 100% shares in EKO Holding S.A. General information On 4 January 2017, Eurocash purchased 100% of shares in the company EKO Holding S.A. based in Nowa Wieś Wrocławska. Thus, Eurocash acquired a network of approximately 250 EKO brand grocery stores (operating mainly in southwestern Poland), which will allow for further development of Eurocash Group and better use of its potential. Consequently, this should translate into revenue growth of Eurocash Group. GENERAL INFORMATION CONCERNING BUSINESS ACQUISITION OF THE UNITS 1. Name of acquired company EKO Holding S.A. 2. Acquisition date Acquisition cost Settlement of business acquisition Due to the very short period between the acquisition of the Company and the preparation of these condensed consolidated interim financial statements, these condensed consolidated interim financial statements present a provisional settlement of the acquisition price of EKO Holding S.A. shares. The Group is in the process of identification and measurement of assets acquired and liabilities assumed. ACQUISITION COST as at Cash /33

25 Condensed interim consolidated financial statements of EUROCASH Group. NET ASSETS ACQUIRED Settlement of the acquisition as at Assets Non-current assets (long-term) Intangible assets Tangible fixed assets Long-term financial assets available for sale Long-term receivables Deferred income tax assets Other long-term prepayments Current assets (short-term) Inventory Trade receivables Other short-term receivables Short-term prepayments Cash and cash equivalents Total assets Equity nad liabilities Liabilities Non-current liabilities Other long-term financial liabilities Long-term loans and credits Other long-term liabilities Deferred tax liabilities Current liabilities Short-term loans and credits Other short-term financial liabilities Trade liabilities Other short-term liabilities Current employee benefits Other short-term provisions Total liabilities Net assets ( ) Net assets acquired (100 %) ( ) Goodwill on acquisition Acquisition cost /33

26 Condensed interim consolidated financial statements of EUROCASH Group. 2. Acquisition of 50% of shares in FHC-2 Sp. z o.o. and Madas Sp. z o.o. General information On 16 th December 2016, pursuant to the preliminary agreement of sale of shares, dated 15th April 2016, Eurocash S.A. concluded an agreement of sale of shares with Marek Stodółka, Bogdan Habrat, Zofia Szubra, Aleksandra Stodółka, Anna Dąbrowska, FHC-2, M. Stodółka i Wspólnicy spółka jawna, FHC-2 spółka z ograniczoną odpowiedzialnością, Fructar spółka z ograniczoną odpowiedzialnością, Madas spółka z ograniczoną odpowiedzialnością, FHC-3 spółka z ograniczoną odpowiedzialnością, pursuant to which Eurocash acquired 50% stake in FHC-2 Sp. z o.o. and Madas Sp. z o.o. based in Krosno. GENERAL INFORMATION CONCERNING BUSINESS ACQUISITION OF THE UNITS 1. Name of acquired company FHC-2 Sp. z o.o. and Madas Sp. z o.o. 2. Acquisition date Acquisition cost Settlement of the business acquisition Based on the analysis performed by the Company, in accordance with IFRS 10, FHC-2 Sp. o.o. and Madas Sp. z o.o. are a subsidiaries controlled by Eurocash S.A. Due to the very short period between the acquisition of the Company and the preparation of these condensed consolidated interim financial statements, these condensed consolidated interim financial statements present a provisional settlement of the acquisition price of FHC-2 Sp. z o.o. and Madas Sp. z o.o. shares. The Group is in the process of identification and measurement of assets acquired and liabilities assumed. ACQUISITION COST as at Cash /33

27 Condensed interim consolidated financial statements of EUROCASH Group. NET ASSETS ACQUIRED Settlement of the acquisition as at Assets Non-current assets (long-term) Tangible fixed assets Deferred income tax assets Current assets (short-term) Inventory Trade receivables Other short-term receivables Other short-term financial assets Short-term prepayments Cash and cash equivalents Total assets Equity nad liabilities Liabilities Non-current liabilities Other long-term financial liabilities Other long-term liabilities Deferred tax liabilities Employee benefits Other long-term provision Current liabilities Other short-term financial liabilities Trade liabilities Current income tax liabilities Other short-term liabilities Current employee benefits Total liabilities Net assets Net assets acquired (50%) Goodwill on acquisition Acquisition cost As part of settlement of the acquisition of 50% of shares in FHC-2 Sp. o.o. and Madas Sp. z o.o., these financial statements present the option for Eurocash S.A. to repurchase the remaining 50% of shares, which was offered by Eurocash S.A. to the remaining shareholders of FHC-2 Sp. o.o. and Madas Sp. z o.o. and which may be exercised after three years from 16 December This option, in the amount of PLN 29,9 million, was recognized in other long-term liabilities and in the shareholders equity. 24/33

28 Condensed interim consolidated financial statements of EUROCASH Group. 3. Acquisition of 100% of shares in Polska Dystrybucja Alkoholi Sp. z o.o. General information With reference to current reports no. 25/2015 of 22 December 2015, no. 25/2016 of 7 October 2016 and no. 28/2016 of 14 December 2016, the Management Board of Eurocash S.A. of Komorniki hereby informs that on 30 December 2016, Eurocash purchased 100% shares in Polska Dystrybucja Alkoholi Sp. z o.o. based in Pabianice, a distributor of alcohol products in central Poland. Acquisition of PDA will increase the Eurocash Group's share in the segment of alcohol distribution, which should result in an increase of its revenues. GENERAL INFORMATION CONCERNING BUSINESS ACQUISITION OF THE UNITS 1. Name of acquired company PDA Sp. z o.o. 2. Acquisition date Acquisition cost Settlement of business acquisition Due to the very short period between the acquisition of the Company and the preparation of these condensed consolidated interim financial statements, these condensed consolidated interim financial statements present a provisional settlement of the acquisition price of PDA Sp. z o.o. shares. The Group is in the process of identification and measurement of assets acquired and liabilities assumed. ACQUISITION COST as at Cash /33

29 Condensed interim consolidated financial statements of EUROCASH Group. NET ASSETS ACQUIRED Settlement of the acquisition as at Assets Non-current assets (long-term) Intangible assets Tangible fixed assets Deferred income tax assets Current assets (short-term) Inventory Trade receivables Current income tax receivables Other short-term receivables Short-term prepayments Cash and cash equivalents Total assets Equity nad liabilities Liabilities Non-current liabilities Employee benefits Current liabilities Short-term loans and credits Other short-term financial liabilities Trade liabilities Current income tax liabilities Other short-term liabilities Current employee benefits Other short-term provisions Total liabilities Net assets Net assets acquired (100%) Goodwill on acquisition Acquisition cost /33

30 Condensed interim consolidated financial statements of EUROCASH Group. NOTE 2. OPERATING SEGMENTS Starting in 2017, the Eurocash Management Board has decided to change the presentation of segments. As a result of the analysis conducted by the Eurocash Group, the Group presents the following segments, which correctly show the diverse of the activity: Independent clients sales transacted by those distribution formats whose clients do not have permanent contracts with the Eurocash Group. The segment includes wholesale operations carried out by the following distribution formats and companies: Eurocash Cash & Carry, Eurocash Alkohole, Eurocash Serwis Sp. z o.o., PayUp Polska S.A., Eurocash Trade 1 Sp. z o.o. and Polska Dystrybucja Alkoholi Sp. z o.o. Integrated clients sales transacted by those distribution formats whose clients have long-term agreements with Eurocash Group, e.g. franchise systems or clients from the HoReCa segment. This segment includes sales organization and wholesale to clients-members of the Delikatesy Centrum franchise chain, as well as operations of such a franchise systems as: Lewiatan, Groszek and Euro Sklep. The segment involves the operations of the following companies: Eurocash S.A. (Delikatesy Centrum format), Euro Sklep S.A., Lewiatan Śląsk Sp. z o.o., Detal Podlasie Sp. z o.o., Lewiatan Podlasie Sp. z o.o., Lewiatan Holding S.A., Lewiatan Zachód Sp. z o.o., Lewiatan Wielkopolska Sp. z o.o., Lewiatan Kujawy sp. z o.o., Lewiatan Opole Sp. z o.o., Lewiatan Orbita Sp. z o.o., Lewiatan Północ Sp. z o.o., Lewiatan Podkarpacie Sp. z o.o. Moreover, this segment includes sales transacted by the Eurocash Gastronomia format, as well as sales realized by Eurocash Dystrybucja under entity Eurocash S.A. and sales realized by DEF Sp. z o.o. and Ambra Sp. z o.o. Retail - retail sale of Eurocash Group companies within the following entities: Inmedio Sp. z o.o., Firma Rogala Sp. z o.o., FHC-2 Sp. z o.o., Madas Sp. z o.o. and EKO Holding S.A. Projects this operating segment comprises the Group's new projects and retail formats in their initial phase of development, operating as the following entities: Eurocash Convenience Sp. z o.o., Kontigo Sp. z o.o, Eurocash Detal Sp. z o.o., ABC na kołach Sp. z o.o., Duży Ben Sp. z o.o., Sushi To Go Sp. z o.o. Sp. k., 4Vapers Sp. z o.o. as well as new projects developed by Eurocash S.A. e.g. project of distribution of fresh products. Other sales realized by Eurocash Trade 2 Sp. z o.o., Eurocash VC2 Sp. z o.o., Eurocash VC3 Sp. z o.o. and the Group s general and administrative expenses not allocated to any operating segment. There are varying levels of relationships between the segments in the Group. These relationships include mutual sales of merchandise, provision of marketing services, logistics, administrative support, and other services. The accounting policies of each specific reporting segment are the same as the policies of the whole Group. Eurocash Group operates only in the territory of Poland which, considering the economic conditions and business risks, can be treated as a uniform territory. In the FMCG wholesale sector, sales in the first quarter of the year are traditionally lower than in the remaining quarters. Highest sales are generated in the summer season, to flatline in Q4. Key managers of Eurocash Group do not periodically review the assets and liabilities of the particular operating segments. 27/33

31 Condensed interim consolidated financial statements of EUROCASH Group. Basic information about each reportable segment is shown below. REVENUES AND PROFITS BY BUSINESS SEGMENTS IN THE PERIOD FROM 01 JANUARY 2017 TO 31 MARCH 2017 Indenpendent wholesale Integrated wholesale Retail New projects Other Exclusions Total Sales ( ) External sales Inter-segmental sales ( ) - Operating profit ( ) ( ) ( ) - ( ) Finance income Finance costs ( ) Share in losses of companies consolidated with the equity method ( ) Profit before income tax ( ) Income tax Net profit ( ) 28/33

32 Condensed interim consolidated financial statements of EUROCASH Group. REVENUES AND RESULTS BY BUSINESS SEGMENTS IN THE PERIOD FROM 01 JANUARY 2016 TO 31 MARCH 2016 Indenpendent wholesale Integrated wholesale Retail New projects Other Exclusions Total Sales ( ) External sales Inter-segmental sales ( ) - Operating profit ( ) ( ) Finance income Finance costs ( ) Share in losses of companies consolidated with the equity method ( ) Profit before income tax Income tax ( ) Net profit /33

33 Condensed interim consolidated financial statements of EUROCASH Group. NOTE 3. ITEMS NOT INCLUDED IN THE STATEMENT OF FINANCIAL POSITION CONTINGENTIES AS AT 31 MARCH 2017 Beneficiary Title Currency as at as at 1 BZ WBK * Surety for the obligations due to the "Franchise partners financing program" for the Franchisee Delkatesy Centrum PLN * debt value as at balance sheet date BANK GUARANTEES AS AT 31 MARCH SECURITIES FOR RENT LIABILITIES as at as at The Issuer Title Currency ING Security payments to suppliers PLN PKO BP S.A. Security for liabilities due to Agency agreement PLN PKO BP S.A. Security for rent liabilities PLN PKO BP S.A. Security for rent liabilities PLN* PKO BP S.A. Security for excise duty PLN PKO BP S.A. Security for using of the national roads PLN PKO BP S.A. The liabilities of the promotion lottery PLN PKO BP S.A. Security payments to suppliers PLN * - Guarantee in EUR is translated into PLN at the average exchange rate of NBP: as at : 1 EUR = 4,4240 PLN, as at : 1 EUR = 4,2198 PLN. 30/33

34 Condensed interim consolidated financial statements of EUROCASH Group. COLLATERALS SECURITIES RELATED TO ASSETS AS AT 31 MARCH 2017 Title Secured property Amount secure in PLN ING security on the credit line agreement * Deposit on inventories Eurocash S.A Securing a framework agreement to provide bank guarantees PKO BP* Deposit on inventories Eurocash Serwis Sp. z o.o WBK security on the credit line agreement * Deposit on inventories Eurocash S.A Security on the consolidated loan agreement to the amount PLN * Security on the consolidated loan agreement to the amount PLN * Financial leasing agreements (due to net value of fixed assets at the balance sheet date) Deposit on inventories Eurocash Serwis Sp. z o.o Deposit on inventories Eurocash Franczyza Sp. z o.o Ownership of fixed assets in financial leasing * security nominal value NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS As at 31 March 2017, the fair value of financial instruments approximated their carrying value. The Group implements interest rate risk security instruments (IRS), which are measured at their fair value. For these IRSs, the fair value was qualified to level 2 of the hierarchy - fair value is determined based on the values observed on the market yet not being direct market quotes (e.g. determined by direct or indirect reference to similar instruments existing on the market). In connection with the applied hedge accounting, the effect of valuation is recognized in other comprehensive income. NOTE 5. IMPORTANT EVENTS DURING THE PERIOD COVERED BY THE FINANCIAL STATEMENTS There were no significant events during the period covered by the financial statements, influencing the activity if the Group. 31/33